3 Ideas to Quickly Generate Profit

3 Ideas to Quickly Generate Profit

If you’re like me, you run a business. And, you do so for profit – for you or for your stakeholders. 


Profit can be summarized by an income statement showing gross revenue, expenses, and net profit. But, I think it’s broken down to two factors: effectiveness and efficiency. The better you can execute on these factors, the greater your profit will be. In order to do that, you have to work smarter, finding ways to generate top-line revenue while minimizing client acquisition costs. 


One of the fastest ways to generate new revenue is to capture a greater share of your clients’ wallets – or more market share of household investments. Creating a new stream of income from existing clients drastically reduces the cost of acquiring a new relationship. 


But how do you create additional revenue without exposing your assets? 


  • First, repurposing old assets make sense as you position your clients for retirement. Many have changed jobs throughout their careers and let assets simply accumulate in former employers’ qualified plans or individually owned IRAs. Those assets should be considered for lifetime income assets. By positioning guaranteed income in the portfolio, you can reallocate the assets under management to meet longer term goals, as well as gain tax efficiency and the potential for growth. If positioned properly, many of these assets can be placed on trail-based compensation to create recurring income for your financial practice.


  • Second, many old assets have beneficiary designations that have not been reviewed. Our firm commissioned a white paper by a respected ERISA attorney that identifies the risks of qualified plan beneficiaries. Taking the time to review and rename beneficiaries can save a family thousands of dollars in income taxes at the time the asset transfers to the next generation. By leveraging this savings, you have the potential to gain the confidence of the next generation. So, reviewing asset beneficiaries has the effect of repurposing the asset as well as creating a bridge to future clients.  


  • Third, as our clients near retirement, many will want to take Social Security. Using an unused asset to create a bridge has proven to be a positive move for many clients. The bridge – in the form of a single-premium immediate annuity – allows the client to receive the same income as an early election from Social Security. However, the strategy generates more than $122,000 more in income from age 70 to 90. The increased leverage from social programs protects assets under management and allows for a positive conversation with the next generation as well. 


Looking within your own client base makes your business more efficient. Your existing clients provide the fastest path to new revenues – many of which can be recurring. 


With so many Americans afraid of running out of money in retirement, you have a chance to provide assurances that your clients will maintain the standard of living they are planning for. When your activities focus on ways to be effective and efficient, the chance of increasing your profits grows exponentially. 


Winning Strategy

To draw profit for your business, look inward. You will earn more business from your existing clients with quality ideas. This creates additional revenue, plus opportunities to be introduced to the next generation. 


About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”